International Conference on Eurasian Economies
9-11 September 2015 – Kazan, RUSSIA
Paper detail
Paper ID : 1395
Status : Paper published
Language : English
Topic : Finance and Financial Crises
Presenter: Assoc. Prof. Dr. Sıtkı Sönmezer
Session : 3A Finance
Effects of Sale of Non-Performing Loans to Asset Management Companies on Stock Performance of Banks
Effects of Sale of Non-Performing Loans to Asset Management Companies on Stock Performance of Banks
- Assoc. Prof. Dr. Sıtkı Sönmezer (Istanbul Commerce University, Türkiye)
Abstract
Asset management Companies, starting from 2006, have a critical role in the banking sector of Turkey in terms of liquidating Non-performing loans into cash. Sale of bad debts enable banks to transfer receivables to asset management firms at a substantial discount and obtain liquidity so that they have more robust financials and their ability to focus on their core businesses which may increase productivity. The objective of this study is to determine the immediate impact of the announcement of recent sales on stock prices of banks. This study provides evidence that 22 statistically significant positive announcements versus 21 negative announcements out of 69 deals broken down by bank. Results indicate that particular deals are overpriced resulting in stock price increases and some are underpriced resulting in losses in the market. It can be inferred that information regarding with the structure and asset quality of deals are accessible.
JEL codes: B26, C58, D53
Sönmezer, Sıtkı (2015). "Effects of Sale of Non-Performing Loans to Asset Management Companies on Stock Performance of Banks" in Proceedings of International Conference of Eurasian Economies 2015, pp.33-40, Kazan, RUSSIA.
DOI: https://doi.org/10.36880/C06.01395
